Basic Developing lessons on a cheapy reno plus a split.

Almost like a prophecy, I've just heard that my most recent development has had a setback.

Was told on purchase that the GrannyFlat was unapproved, which played well into my subdivision plans as they will be on separate blocks. They said that council inspectors came out and determined the roof was too low, therefore uninhabitable.
So even council didn't think to check if it had already been approved.

Also, wanting to build a Granny flat to move into before I demolish the unapproved one and subdivide the block.

Hear back from council, 10months later that they have found it actually was approved via complying development in 2013, so I could've rented the property out for a solid 6months before moving in, 26weeks worth of rent at about $200 a week, so $5.2k lost there.
I will potentially have to demolish it and move out to build the GrannyFlat that I'm proposing, which will be 6months of rent I'll have to pay, a further $7.8k, thats assuming the build doesn't take longer than expected.
I could possibly repurpose the Granny flat to a dual-occ then subdivide off, so the GrannyFlat can remain, but that means I won't be able to start building the new GF until the subdivision is finalised.
One of many roadblocks to encounter, haha
Will have to get some advice as to the best course of action.

 

All fun N games eh looking forward to seeing this progress mate.

 

Absolutely, if it was easy, everyone would be doing it as they say.

I've learnt alot of patience, and I'm always learning.
If I goto buy another development block, I certainly won't even take council on their word and dig further, it's a shame how little some people know their jobs.

 

True mate, if building wealth was a walk in the park most ppl would go for it.

I hear you re councils. I can honestly tell you they are clueless, clueless, clueless. It often depends on which town planner you speak to at council and what their mood is on the day. I've had councils tell me all sorts of rubbish in the past. I now only listen to my expert town planner then engage with council as a courtesy mostly.

 

I don't suppose you had Title Insurance? Pretty sure that would have covered a situation like that.

 

I didn't opt for it no, how would it help in my current predicament?

 

I think it covers demolition of unapproved structures which is what originally council thought you had. Would be interesting to see what they would cover for your losses of demolishing something under orders of council when it actually was an approved dwelling.

 

Sorry, I think I may have misconstrued, I'm not being forced to demolish, only when I proceed to subdivision, because it's tied to the main property.

But for my plans to proceed with the Granny flat I wanna build, I'll have to demolish the existing Granny flat or repurpose it to a dual-occ and subdivide off with the new subdivided lot, requires me to build a carport only to knock it back down shortly after.

Confusing times, haha.

 

Clear as mud

 

Indeedy, haha.

Further emphasizes why extremely conservative estimates should be allowed for when thinking about developing imo.

There is no doubt lots of things that I'm doing that are unorthodox and slow me down as well, but it's part of the learning experience tbh.

Could also be that I'm cursed with bad luck in my investing decisions, but I haven't been put into bankruptcy yet, so it isn't all bad.

 

Trust me your not mate. At some point on every development I felt I've been cursed with bad luck..

 

You're actually right there, I love problem solving, so this just further adds to putting my mind to work, something I've been asking for for some time seeing as how my job is mind numbing.

 

Hi Guys ,
So sorry for massive delay for this !Being a Dad is totally FULLON let me tell you !!!!
I finally did the figures very quickly ;

Purchase Price:227K
(Plus I had a friend come in early so with purchase legals etc it was ;
$117750 me
$117750 partner)
So I paid her out $123,600 plus second lot of stamp duty of $3439 for her half
=$127039
So the property owed me $244,789 with legals early on which included about $1k of materials and 1k worth of labour from her part.
Then I spent
Labour:19463
floorboards:1473
Council:981
DA cost:4700
UUtilities:259
Elec supply:397
Electrical repairs/upgrade:2291
Insurance:970
DS carpet:1298
Paint:1412
Front entry fit double doors:700
Appliances:909
Rear deck,rails,awning steps:$10k
Front lower sliding door and screen:1058
shower screens and towel rail fitted:970
Kitchen wall opening and new doors:2250
concrete slabs labour:1070
Materials:17670
Tolls and transport to job and pickups:1470
Sale costs(Agent,sol,advert,stage etc):14450
SUBTOTAL:$328580

Sale Price ;$366K minus $2k Adback to buyer=$364K

Raw profit: $35420

My input was estimated at 6 months full time labour on top.

 

Do you mean that when you did your pre-purchase due diligence that you formally asked council if the gf was approved that they said it wasn’t approved?

Or did you get that info from the vendor at the time?

 

Vendor at the time, next time i'll make more in depth enquires.

It was a rather hectic month tbh, 2 contracts issued, race to get finance first etc.

 

Full time 6 months, working a 40hr week, you earned roughly $34/hr

 

Plus the relationships and experience for my 400 block subdivision coming up !!

 

Absolutely man, it's all learning in my books.

 

Sorry for late reply joynz,
a few things that were done;

I did all of the management and also some labour but didn't tile this time .I paid about 17k labour out.
This house needed work on every level.So the concrete slab at ground level had dropped in areas (footing s were ok though) so I pulled out the old slab sections and then compacted it and re slabbed it in parts.(on a tight budget)Then we levelled it as best we could for low $$.Then I carpeted it to make it into multi purpose/living space .This opened up the house to more functionality on low budget.I also had a slider put in on the right garage door side for access.

The upper level needed 145metres of new hardwood flooring.then we sanded it completely (whole floor) and glossed it x3 coats.
The roof was corrugated iron- rusty so we replaced/ repaired the sheets that were damaged and then painted it fully.
The gutters were u/s so we replaced them. Now this is a good lesson .-2 storey houses or highsets are high off the ground so you have to get scaffolding to do anything so this is an extra hassle and cost(especially if you hate heights !)

The drainage on this was non existent on most of the house so all new downpipes and we had to go under ground with new pipes and a pit at rear

plus heaps of other things !

 

you mean those muffins arent included in the sale!!??